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1 THE REGION ENGAGED CURRENT TRENDS VISION & STRATEGY PROJECTS CURRENT STATE OF THE REGION & QUALITY OF PLACE 24 EXECUTIVE SUMMARY

2 CURRENT Northern Indiana has a variety of economic, demographic and quality of place strengths and challenges related to the key place-based development success factors of density, connectivity, amenities and productivity. The region s ability to enhance its competitiveness and attract talent is threatened by flat population growth, a labor force participation cliff, lagging productivity rates and the need for additional amenities. The region s key strengths include: many existing place-based assets, a competitive cost structure, access to markets, higher education resources, and cultural diversity. Innovation Districts are already emerging throughout the region, and leaders are exploring additional place-based development opportunities in their communities, through initiatives such as Smart Streets in Downtown South Bend and Horizon 3.0 in Elkhart County. Density Northern Indiana s culturally rich communities are a positive feature for many prospective residents and businesses. If broader current population and demographic trends continue, however, the region s ability to achieve population and employment density will decline as population growth slows and the existing workforce ages and retires. Northern Indiana s increasingly diverse community is a strength and opportunity as more Americans prefer to live in communities with diverse populations, [19] and businesses with more diverse workforces report higher rates of innovation and growth compared to less diverse organizations. [20] [19] [20] RISING FROM THE ASHES As South Bend finds the future, ND s part shifts from Rockne to research. - Notre Dame Magazine, Summer 2015 (Exhibit C-4) 25

3 CURRENT The region s Hispanic/Latino population, 10% of the population, is greater than the state s (6%). The largest concentration of Hispanic population is in Elkhart County with 28,064, which is almost 15% of the population. The next largest population is in St. Joseph County; which it makes up the smallest percentage of the total population at 7%. Retirees are attracted to the area due to the low cost of living, access to amenities and proximity to major cities. Stakeholders shared anecdotes of retired couples moving to the area from Chicago to take advantage of a convenient, less expensive lifestyle in a location with many recreational opportunities and access to Lake Michigan and the Chicago metropolitan area. Finally, the three counties in the Northern Indiana Region are home to more than 40,000 higher education students (figure 4), with another 10,000 students in the surrounding counties. Students are recruited to the area each year from throughout the region, United States and international locations. This creates a unique opportunity to engage this talent and recruit them for long-term opportunities in the region. Although the region is attracting a variety of people, Northern Indiana s population growth is expected to slow and/or decline over the coming decades. Between now and 2040, Northern Indiana s population growth rate is expected to both decline and be lower compared to the state and the United States. FIGURE 4 ENROLLMENT AT NORTHERN INDIANA REGION INSTITUTIONS OF HIGHER EDUCATION INSTITUTION POPULATION TOTAL ENROLLMENT 1 IVY TECH COMMUNITY COLLEGE SOUTH BEND, ELKHART, & WARSAW 15,000 2 NOTRE DAME NOTRE DAME 12,004 3 INDIANA UNIVERSITY OF SOUTH BEND SOUTH BEND 8,490 4 BETHEL COLLEGE MISHAWAKA 1,885 5 SAINT MARY S COLLEGE NOTRE DAME 1,469 6 GOSHEN COLLEGE GOSHEN ANCILLA COLLEGE PLYMOUTH HOLY CROSS COLLEGE NOTRE DAME PURDUE POLYTECHNIC INSTITUTE SOUTH BEND 150 Source: Michiana Partnership TOTAL 41,091 26

4 CURRENT Other estimates project that the region will experience population declines and net out-migration over the same period (figure 5). The Urban Institute estimates that the region (defined as the South Bend commuting area) will experience negative population growth at the rate of 1.04% between 2010 and [21] It is important to note a recent change in trajectory for South Bend, the largest city in the region. South Bend was growing in 2014 population estimates for the third time in the four estimates since the 2010 census. While this is small growth of 100,990 in 2010 to 101,190 in 2014, this is the first period of growth after decades of declining population after the high of 132,445 in FOCUS ON RETAINING UNIVERSITY TALENT CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR Office of the Mayor FIGURE 5 ESTIMATED CHANGES IN AGE POPULATION Dear Students: Welcome to South Bend. We re pleased to be a collegiate community with an environment that integrates city and university, students and residents alike. Just as you are a part of the University of Notre Dame now, while you re in South Bend whether it s for the next four years, or the next 40 years we want you to feel like it s home. There are opportunities for educational enrichment, professional development, community service, entertainment, and recreation all at your fingertips here. Take advantage. Both you and our community will be the richer for it. This is an exciting time in South Bend. New businesses are opening and bringing good jobs and revitalization with them. The opportunities available now have made choosing South Bend as the place to live and work post-graduation a more common choice. Young people are driving a lot of the cultural, social, and economic growth South Bend is experiencing. In ways you might not initially realize, you ll benefit from the efforts of many not much older than you during your time here. You ll also be encouraged to contribute to our city s life and future. An openness to ideas and willingness to innovate have been essential to South Bend s recent transformation and the diversity and vitality, the intellect and the insight that students offer, is sought after to keep us moving forward. Welcome to the neighborhood, and on behalf of the City of South Bend, welcome home. Sincerely, Pete Buttigieg Mayor (Exhibit C-1) [21] % Change in workforce 2010 to 2040 Growing Neutral Declining Source: STATS Indiana using data from Indiana Business Research Center 27

5 % CHANGE IN POPULATION CURRENT The region s aging population will also impact the sustainability of the local workforce as older workers retire and a limited number of younger workers are available to succeed them. The median age in Northern Indiana is expected to increase from 36.6 in 2010 to 38.9 in 2030, with limited and/or declining growth in population cohorts within prime working age (figure 5, 7, 8 & 9). FIGURE 6 REGIONAL, STATE, & NATIONAL POPULATION GROWTH RATES, Source: U.S. Census Bureau and Indiana Business Research Center FIGURE 8 REGIONAL, STATE, AND NATIONAL MEDIAN AGE, LOCATION ELKHART COUNTY MARSHALL COUNTY ST. JOSEPH COUNTY RCNI REGION INDIANA UNITED STATES Source: U.S. Census Bureau and Indiana Business Research Center FIGURE 7 REGIONAL, STATE, & NATIONAL MEDIAN AGE, MEDIAN AGE Source: U.S. Census Bureau and Indiana Business Research Center REGION INDIANA UNITED STATES FIGURE 9 NORTHERN INDIANA REGION POPULATION AGE DISTRIBUTION, 2013 & 2040 NORTHERN INDIANA, 2013 NORTHERN INDIANA, 2040 AGE FEMALE MALE REGION INDIANA UNITED STATES 85+ yrs yrs Significant decrease in the region s yrs prime labor force in the coming decades yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs 5-9 yrs 4-0 yrs 20,000 10, ,000 20,000 20,000 10, ,000 20,000 Source: U.S. Census Bureau and Indiana Business Research Center FEMALE MALE 2040 AGE 85+ yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs yrs 5-9 yrs 4-0 yrs 28

6 CURRENT Connectivity Physical, communications, and social networks connect Northern Indiana both internally and externally. Increased connectivity in all of these areas is needed in order to better position the region for the global knowledge-based economy. PHYSICAL CONNECTIONS Given its central Midwest location and proximity to Chicago, Detroit, and Indianapolis, the region enables access to major cities, markets and customers (figure 10). Residents can drive, fly or take the train to major markets across the country. Businesses can access these areas by a robust infrastructure of international air service, freight trucking and rail. Three of the nation s most important arteries Interstates 80, 90 and 94 span the region, linked to U.S. 12, 20, 30 and 31 s long stretches of limited access, divided highways. Rail mainlines for CSX, Norfolk Southern and Canadian National cross the area, with numerous branch lines, regionals and short lines to link local companies with the nation s FIGURE 10 rail network. Passenger rail options include multiple Amtrak lines and stations, along with South Shore commuter rail service between South Bend, Michigan City and downtown Chicago. The Northern Indiana RDA and the Northwest Indiana RDA are collaborating on a $276 million inter-regional project to drastically improve the reliability, safety, frequency and trip speed of the South Shore train from Northern Indiana communities to Chicago. THE CENTRAL LOCATION FOR THE REGIONAL CITIES OF NORTHERN INDIANA Source: 2012, U.S. Census Bureau 29

7 CURRENT The South Shore line provides a distinct opportunity to improve connectivity to Chicago and its world-class economy and amenity base. Increasingly, Northern Indiana residents will seek employment in Chicago, which on average earns 40% more than similar jobs in Northern Indiana. These wages are returned to Indiana and reinvested in the community to purchase homes, goods and services. Furthermore, a faster, more reliable commuter rail connection opens Northern Indiana to new investment by new knowledge-based industries where talent is attracted to low property taxes, superior housing, good schools and other quality of place attributes. The South Bend International Airport s three air carriers provide nonstop flights to 10 cities with connections worldwide. South Bend International s multi-modal terminal serves over one million air, rail, and bus passengers each year and has a total [22] annual economic impact on South Bend and surrounding communities in excess of $1.7 billion. Public transit services such as Transpo and an Inter-urban Trolley are available in certain parts of the region. Stakeholders are concerned however, that transit connectivity between communities is limited, and where it is available, it is not as convenient as in other cities. COMMUNICATIONS CONNECTIONS A large number of infrastructure systems converge in the region as their routes pass below Lake Michigan. In addition to roadway and power transmission systems, this convergence includes many North American fiber optic long-haul carriers. In fact, St. Joseph County has what is believed to be the largest concentrations of fiber optic long-haul carriers in the United States all centrally managed through Union Station Technology Center. The South Shore line provides a distinct opportunity to improve connectivity to Chicago and its world-class economy and amenity base A major private not-for-profit dark fiber network, St. Joe Valley Metronet [22] provides direct connection opportunities for area businesses. 30

8 CURRENT This region, through the Metronet, has taken steps to overcome what would normally be an impediment to the development of major data-centric businesses, namely the lack of direct access to multiple carriers. The network consists of over 150 miles of single-mode fiber, deployed in connected, redundant loops, developed in a ringed network for highly-reliable redundancy. The Metronet currently provides innovative services to 180 subscribers in both St. Joseph and Marshall counties. One of the key projects going forward is to expand services throughout these counties and increase them in Marshall County and Elkhart County. The initial development of this private network, and subsequent expansions are funded by private sector companies who are the largest users of broadband connectivity. Many of the fiber lines converge in Downtown South Bend, near the former Union Station train terminal. There has been significant investment into this area, through projects such as Ignition Park and the Renaissance District. The terminal itself, has been redeveloped into the Union Station Technology Center, Indiana s second largest carrier hotel and a top 40 carrier hotel nationally [23]. Through such facilities, the region has direct digital connections to major areas such as Chicago, Indianapolis and St. Louis. Some parts of the region however, do not have high-speed internet that is standard in other communities in [23] the region and throughout the United States. Major redevelopment is planned for this building and others in the Renaissance District, as further outlined in the project summary. Ignition Park sits on the grounds of the former Studebaker Corp., the legendary auto manufacturer that was the economic and innovative backbone of South Bend until closing its doors in Since 2000, old abandoned buildings on the Ignition Park site have been demolished in the state s most aggressive brownfield reclamation effort to make way for a high-tech manufacturing, commercialization and office complex of buildings arrayed in a parklike environment. The technology park is one of the two locations in South Bend that make up Indiana s first two-site State-Certified Technology Park, which was forged through the City of South Bend s partnership with the University of Notre Dame, local economic development groups and the state of Indiana. The other is Innovation Park at Notre Dame, located on 12 acres on the city s northeast side across from the Notre Dame campus. SOCIAL AND ORGANIZATIONAL CONNECTIONS Connecting employers with high-value talent is another area of both opportunity and concern. Employers continue to express the need to attract and connect with highly skilled workers. 31

9 CURRENT There are a number of active social networking groups, such as young professional networks, throughout the region. Yet stakeholders, particularly younger people and young professionals, would like to see more cross-regional networking opportunities and increased awareness of entertainment and cultural events occurring in the region. Regional planning, promotion and development organizations exist and are active members of broader coalitions of organizations. Regional coordination of promoting and developing Northern Indiana was noted as an opportunity for improvement, however. Stakeholders noted that economic development boards are not as well linked as they could be to collaboratively market the region, both internally and externally. Finally, there are a number of community development organizations throughout the region that connect residents across the socioeconomic spectrum to resources and programs to help them succeed and prosper. Regional stakeholders continue their work to ensure that all members of the community immigrants, middle class and youth are involved in civic life and have access to good jobs and career opportunities. This is especially important as the region s demographic make-up continues to shift toward a more diverse population. FIGURE COST OF LIVING INDEX (COLI) INDEX VALUE REPRESENTS A PERCENT OF THE NATIONAL AVERAGE LOCATION COLI ELKHART - GOSHEN, IN 94.0 SOUTH BEND, IN 91.9 NATIONAL AVERAGE Source: Council for Community and Economic Research, ACCRA Cost on Living Index, (copyright). FIGURE 12 STATE CORPORATION INCOME TAX RATES 2015 STATE TAX RATE (%) NOTES INDIANA Scheduled to decrease to 6.5% on July 1, 2015 ILLINOIS 7.75 KANSAS 4.00 Also levies a 3.0% surtax on taxable income over $50,000 KENTUCKY MICHIGAN 6.00 MISSOURI % of the federal income tax is deductible Imposes Commercial Activity Tax (CAT) equal to $150 for OHIO gross receipts issued to Ohio of between $150,000 and $1 million, plus 0.26% of gross receipts over $1 million PENNSYLVANIA 9.99 TENNESSEE 6.50 WISCONSIN 7.90 Source: Federation of Tax Administrators February

10 CURRENT FIGURE PERSONAL INCOME TAX RATES LOCATION TAX TYPE RESIDENT RATE NONRESIDENT RATE ELKHART COUNTY County Adjusted Gross Income Tax/ County Economic Development Income Tax MARSHALL COUNTY County Adjusted Gross Income Tax ST. JOSEPH COUNTY County Option Income Tax/ County Economic Development Income Tax STATE OF INDIANA Adjusted Gross Income Tax 3.30 N/A Source: State of Indiana Department of Revenue Amenities Northern Indiana offers residents and businesses a variety of recreational and cultural amenities in addition to a low cost of living, low energy and water costs, a favorable tax climate and a variety of housing and facilities from which to choose. Amenities such as downtown housing and expanded retail entertainment options are needed in the region in order to retain and attract talent and residents. While new mixed-use developments have been developed in recent years, such as Eddy Street Commons on the edge of the Notre Dame campus, the region will be challenged to fund and invest in future amenities and programs if the region s population and labor force declines and ages. Northern Indiana residents have access to regional and local amenities such as Lake Michigan beaches, bike trails, a burgeoning local culinary scene, minor league baseball, theaters and a zoo, not to mention the cultural, sporting and community activities that the region s higher education institutions provide. Historical industrial buildings being redeveloped throughout the region will create an exciting and unique setting for the region s up-andcoming Innovation Districts and urban housing. Cities such as South Bend, Mishawaka, Plymouth, Goshen, and Elkhart have riverfronts and water amenities that can become urban attractions. FIGURE PROPERTY TAX RATES LOCATION HIGHEST LOWEST MEDIAN ELKHART COUNTY MARSHALL COUNTY ST. JOSEPH COUNTY STATE OF INDIANA Source: STATS Indiana, using Indiana Department of Local Government Finance data 33

11 CURRENT FIGURE 15 NORTHERN INDIANA ENERGY RATES COMPARED TO STATE AND NATIONAL AVERAGES Source: EEI Typical Bills Average Rates Report Summer 2014 For example, by installing and connecting parks and trails along waterfronts, these amenities will enhance the urban experience and will connect residents to the more rural parts of the region. The region s distinct urban areas are surrounded by suburban and rural environments, thus providing a full range of residential options for current and prospective residents. Given the region s close proximity to major metropolitan areas such as Chicago and Indianapolis, families can easily access big-city entertainment and amenities while still enjoying a convenient and affordable lifestyle in Northern Indiana. South Bend/Mishawaka and Elkhart/ Goshen; the two largest urban areas in the region, have lower than average costs of living compared to urban areas across the United States (figure 11). The region s tax rates are also competitive, particularly in comparison to state rates and other parts of the United States (figure 12, 13 & 14). These factors are important to businesses and households seeking to maximize their financial resources. COMMERCIAL INDUSTRIAL RESIDENTIAL I&M STATE AVERAGE USA AVERAGE CENTS PER KILOWATT-HOUR Businesses have access to energy, natural and water utilities at competitive rates, which is especially important for energy-intensive industries such as high-tech manufacturing (figure 15). Businesses and trade groups also recognize the availability of corporate facilities in Northern Indiana. 34

12 CURRENT The Elkhart/Goshen metro area placed third this year in Site Selection magazine s Governor s Cup rankings for new and expanded corporate facilities in places with less than 200,000 people. In 2014, Elkhart County had 12 corporate facilities that met Site Selection s criteria of involving at least a $1 million investment, creating 20 new jobs, or adding at least 20,000 square feet of space. [24] Community members and leaders recognize the need for additional investment in downtown housing and amenities. For example, a 2013 study of the downtown South Bend residential market, estimated demand for approximately 1,525 new housing units in downtown South Bend (Figure 16). [25] While financing programs can incentivize some of this development, stakeholders also recognize the need for population growth in order to attract and sustain private-sector-led investments in these facilities. Northern Indiana will be challenged to publicly finance future educational, transportation and recreational facilities and services if the region s population and workforce trends continue on their current trajectory. In addition to a projected reduced labor force, by 2040, the largest population groups will be under the age of 20, and the population 75 years and older will double. These younger and older cohorts regularly receive public support for schooling, transportation, recreational services and similar activities. A larger labor force, particularly one earning higher wages, is required in order to provide the tax revenues to fund these necessary programs. FIGURE 16 POTENTIAL MARKET FOR NEW HOUSING UNITS DOWNTOWN SOUTH BEND City of South Bend, St. Joseph County, Indiana HOUSING TYPE # OF HOUSEHOLDS % OF TOTAL Multi-family for-rent (Lofts/apartments, leaseholder) % Multi-family for-sale (lofts/apartments, condo/co-op ownership) % Single-family attached for-sale (townhouses/rowhouses, free-simple/condominium ownership) % Low-range single-family detached (houses, free-simple ownership) % Mid-range single-family detached (houses, free-simple ownership) % High-range single-family detached (houses, free-simple ownership) % Source: Zimmerman/Volk Associates, Inc., 2013 TOTAL 1, % [24] [25] Zimmerman/Volk Associates, Inc., 2013, An Analysis of Residential Market Potential Downtown South Bend 35

13 Productivity The region has a concentration of higher education institutions that support regional productivity goals through employment, R&D, workforce development and business development activities. Northern Indiana s GDP and per capita income growth lags state and national rates, and the region faces a shortage of skilled workers. Northern Indiana s universities and colleges have an important role in the region s innovation and entrepreneurship ecosystem due to their R&D relationships with private sector partners and extensive commercialization activities. These institutions also recognize the importance of community engagement and partnerships with regional constituents. For example, fostering community partnerships and external engagement are components of both the IU South Bend and University of Notre Dame current strategic plans. These institutions are investing in and achieving these strategic goals. IU South Bend and Notre Dame have invested in housing and mixed-use projects that have improved the quality of life in surrounding neighborhoods and are engaged in scientific discovery and technology commercialization programs. Notre Dame has created an entrepreneurial...need to expand our collaboration at home, investing our time and resources with partners in South Bend and the Michiana region to support the area s economic growth, both for the sake of the region itself and its role in making Notre Dame a leading place to teach, learn research, and work. - Notre Dame Strategic Plan pipeline including technology transfer, patent support, student internships and training programs. In 2013, Notre Dame started a $3.5 million Irish Innovation Fund to provide investments in new ventures led by students. Overall, the pace of technology transfer has increased significantly, with the number of patents awarded tripling annually. Between 2007 and 2014, there was a 65% growth in research spending to $182 million and the number of inventions disclosed by Notre Dame faculty and researchers rose by 35%. During 2014, 108 inventors produced 65 new disclosures, 33 investors were awarded 24 patents, and 13 technologies representing the work of 19 researchers were licensed. These discovery and commercialization programs are supported by major investments from academia, the private sector and public entities in R&D facilities and entrepreneurship programming. 36

15 Over 40,000 students are attending these institutions; and we are developing the necessary innovation district ecosystem that will enable them to stay after graduation. are seeking, as well as being prepared to accommodate their needs at the speed of business. The location of the Notre Dame Turbomachinery Laboratory within Ignition Park creates additional density in a growing Innovation District and aligns with the Innovation District practice of anchor institutions strategically locating key facilities in advantageous areas. It cannot be emphasized enough that the entrepreneurial and cohesive community partnership between the City of South Bend, Notre Dame, Great Lakes Capital and AEP/I&M leadership contributed significantly to securing this opportunity and improving the landscape for future development in this area. It also sent a signal of the power of collaboration and a renewed commitment to advancing the asset base in order to attract business and talent and capture a viable return on the investment made. In part due to the benefit provided by the substation, a 28-acre site within Ignition Park is in the final stages of being designated as a Data Center Certified site by Biggins, Lacy - enfocus and Shapiro (BLS) and its partner Sugarloaf. Another example is in Innovation Park, which has become a hub of entrepreneurial energy for the University of Notre Dame and community since it opened in Innovation Park at Notre Dame cultivates marketable innovations in an inspiring environment, with access to Notre Dame cutting-edge research, worldclass faculty and students, and the global network of Notre Dame entrepreneurial veterans. In simple terms, Innovation Park CONNECTS aspiring entrepreneurs with ND faculty, students and other resources to COLLABORATE with Notre Dame industry experts to COMMERCIALIZE the new venture successfully. This 55,000 square-foot facility is 97% full and looking to expand. Nearly 80 tenant companies could spiral into hundreds of local jobs. Four successful ventures Vennli, F Cubed, Nexus RV and Data Realty have already created more than 200 jobs in the region. BRAIN RETAIN => BRAIN GAIN These schools are also partners in workforce and business development efforts since they provide training opportunities for the local labor force, and they coordinate broad networks of alumni and leaders who may consider investing in the region. They offer a solution to Indiana s chronic problem of net out-migration of college graduates. 38

16 CURRENT Today, Indiana cultivates the 14 th highest number of graduates in the U.S., but is 48 th in keeping them here. Northern Indiana, with 40,000 college students, is in a unique position to reverse this trend. In the emerging knowledge economy, human capital helps determine the speed and success of communities in adapting to new opportunities. This region needs people with the skills to thrive in this technological environment. The colleges and universities in Northern Indiana, including Notre Dame, Saint Mary s, Holy Cross College, IU South Bend, Bethel College, Goshen College, Ancilla College and Ivy Tech Community College, provide their students and employees with opportunities to develop their talents, and through this education enfocus projects more than 245 new career opportunities to be created within five years as a result of these early actions. - enfocus and training, these institutions of higher learning are helping to build a workforce for the new economy. Over 40,000 students are attending these institutions; and we are developing the necessary innovation district ecosystem that will enable them to stay after graduation. In the past decade, Notre Dame, with financial support from the Lilly Endowment, partnered with the City of South Bend, St. Joseph County and many Indiana corporations to implement supportive strategies to reverse the outgoing tide of migration of its graduates and those of other Indiana colleges. The desired result is an increase in the percentage of Indiana citizens with high levels of educational attainment and careers that reward that talent. Experience and independent research has demonstrated that the root of the net outmigration problem is a lack of career opportunities for young professionals, not their lack of preparedness or awareness. The enfocus Solution: Leaders of Notre Dame s Engineering, Science, Technology, Entrepreneurship Excellence Master s (ESTEEM) Program collaborated with South Bend community leaders to establish enfocus, a separate 501c3 organization, to help existing companies grow, support the founding of new companies, and create high-level careers in the community. 39

17 CURRENT FIGURE 17 enfocus IMPACT enfocus deploys a three-pronged flywheel model that leverages the following operating activities: INVESTMENT SOCIAL SERVICE PROJECTS FELLOWS RETAINED REGIONALLY NEW COMPANIES Source: enfocus Retain and develop top talent Infuse that talent to build a stronger community Spark innovation and entrepreneurship enfocus recruits recent Indiana college graduates to accept one-year enfocus Fellow positions. enfocus leadership and the Fellows then recruit Indiana college students as interns. Fellows manage a team of interns and work as paid consultants to entities in the South Bend area for 70% of their time to help those clients create and deploy innovations ranging from new >25 6 $160k 75% products and services to adjustments in business practices. Fellows are also expected to use 30% of their time to either assist community not-for-profit organizations with similar challenges, or work on kick-starting their own entrepreneurial endeavors. Fellows receive a modest salary and living accommodations close to one another to enable creation of their own collaborative entrepreneurial group. An intended collective effect of these Fellowship and internship components is to encourage and enable Fellows and interns to remain in the Northern Indiana Region and start their own companies or work with local organizations after their Fellowship or internship term is completed (figure 17). 40

18 CURRENT Recent History and the Current State of enfocus: In 2012, the pilot enfocus hub was launched in South Bend/ St. Joseph County, aided by approximately $300,000 from eight organizations. Seven Notre Dame ESTEEM graduates declined higher-paying job opportunities elsewhere to stay in the community and work as enfocus Fellows for private, public and non-profit clients. This original cohort delivered tangible results across major industries, including municipality, health care, education, nonprofit and for-profit. Client feedback and testimonials were extremely strong. There was early evidence, therefore, that organizations, recent graduates and donors perceived great promise in the initiative. Based on the early success and demonstrated potential of enfocus, a $3 million grant to the University of Notre Dame from The Lilly Endowment in 2013 is enabling enfocus to build out and test its full Fellowship model in South Bend. Their success has paved the way for enfocus hubs to be designed for additional locations across Indiana and beyond. enfocus projects more than 245 new career opportunities to be created within five years as a result of these early actions. Since the Lilly grant award, enfocus has attracted 124 new Fellows, interns and cumulative retentions to only the South Bend site. Fellows have provided millions in value to local organizations in such areas as technology deployment, new business/program development and process improvement, while also retaining 75% of its Fellows in the local economy. Less tangible outcomes are long-term relationships developed by extensive enfocus and Notre Dame collaborations with other colleges, companies and communities. Where Do We Go from Here? enfocus will progressively deploy adaptations of its enfocus South Bend pilot to other communities as scalable, self-sustaining initiatives that turn brain drain into brain retain and, eventually, brain gain. enfocus sees this game-changing initiative bolstering local/regional economies and communities by beginning at home in St. Joseph County and spreading virally across Northern Indiana. enfocus fosters both intrapreneurship and entrepreneurship in its role as a bridge between the academic community and the surrounding economy. The intrapreneurial facet is expressed through consulting engagements for enfocus Fellows/interns with local businesses, organizations and governmental agencies. The entrepreneurial facet is expressed through the engagement of enfocus Fellows/interns with startup businesses; the expectation is that some of these businesses will be created by the Fellows/ interns themselves. Among the economic development efforts within the control of a community, establishment of new entrepreneurial companies may create the largest number of careers for college graduates. Thus, a 41

19 CURRENT new strategy for enfocus to augment its capability to achieve brain gain is to expand the entrepreneurial facet of the model as a promising source of new career opportunities. The ultimate vision of enfocus is to become a force multiplier for regional economic development, creating vibrant ecosystems of innovation and entrepreneurship. A Key Role in Attraction: Finally, institutions of higher education play a key role in resident attraction since they regularly recruit students and faculty to the area and contribute to the region s quality of life via cultural amenities and community development resources. As Notre Dame s 2014 Economic Impact study points out, Beyond the business opportunities and jobs created by the University s investment in its employees, purchases and facilities, Notre Dame s growth enhances its ability to fulfill its mission and its ability to attract employees, students and visitors to a thriving community, and contribute to an improving quality of life in the region. Regional GDP: Despite development of growth-oriented programs and initiatives, the Northern Indiana regional economy did not grow as fast as the state and the nation between 2001 and Estimated regional GDP growth between 2001 and 2013 was slower than the state and the nation (figure 18 & 19). The 2013 Northern Indiana regional GDP is estimated at more than $26 million, representing approximately 8% of the State of Indiana s GDP. [27] Regional per capita income is lower compared to the state and the nation, and declined between 2010 and 2013 while incomes went up in Indiana and the United States (figure 20 ). FIGURE REGIONAL AND STATE GDP (IN MILLIONS) LOCATION 2013 GDP %OF STATE GDP Elkhart County $12,042 4% Marshall County $1,747 1% St. Joseph County Northern Indiana Region $13,003 4% $26,792 8% STATE OF INDIANA $317, % Source: U.S. Bureau of Economic Analysis FIGURE 19 ANNUALIZED GDP GROWTH, LOCATION Northern Indiana Region GROWTH RATE 3.39% INDIANA 3.64% UNITED STATED 3.90 Source: U.S. Bureau of Economic Analysis FIGURE 20 REGIONAL, STATE, AND NATIONAL PER CAPITA INCOME, 2010 AND 2013 LOCATION CHANGE Elkhart County $22,187 $21, % Marshall County $22,493 $21, % St. Joseph County Northern Indiana Region $23,082 $23, % $22,683 $22, % INDIANA $24,058 $24, % UNITED STATES $27,334 $28, % Source: U.S. Census Bureau, year American Community Survey; U.S. Census Bureau, American Community Survey [27] Estimated based on methodology in Estimating GDP at the Parish (County) Level: An Evaluation of Alternative Approaches ( B890EstimatingGDPattheParishLevelJan2012.pdf) 42

20 CURRENT FIGURE 21 REGIONAL, STATE, & NATIONAL EDUCATIONAL ATTAINMENT EDUCATION LEVEL Tech Workforce: Northern Indiana s higher education attainment rates are lower than state and national levels, a data point that may impact the region s ability to attract, retain and grow innovative companies (figure 21). In particular, the region s and the state s limited tech workforce is a barrier to innovation and growth. While Indiana recently performed well overall in the Consumer Electronics Association s 2015 Innovation Scorecard, the state received low marks for its Tech Workforce and Entrepreneurial Activity (figure 22). Businesses will not launch, locate or continue operating in the area if they cannot rely on a pipeline of highly educated or skilled employees. Indeed, some Northern Indiana entrepreneurs report not being able to expand due to limited availability of local talent. Northern Indiana s burgeoning innovation ecosystem benefits from world-class educational institutions and the state s ELKHART COUNTY MARSHALL COUNTY ST. JOSEPH COUNTY NORTHERN INDIANA business-friendly environment, but without an entrepreneurial tech workforce, the region and the state will fall behind in the global marketplace. This region offers the opportunity to focus on tech workforce and entrepreneurial activity, to bolster the overall attractiveness of the state s innovation ecosystem. INDIANA UNITED STATES Less than 9th grade 8% 6% 3% 5% 4% 6% 9th to 12th grade, no diploma 12% 10% 9% 10% 9% 8% High school graduate or equivalence 37% 42% 32% 35% 35% 28% Some college, no degree 19% 20% 22% 21% 21% 21% Bachelor s or Associates degree 18% 17% 23% 21% 22% 26% Graduate of professional degree 6% 6% 10% 8% 8% 11% Source: American Community Survey 5-year Estimates FIGURE 22 Right to Work A+ Welcomes New Business Models - Tax Friendliness B+ Entrepreneurial Activity Fast Internet D Tech Workforce C+ Attracts Investment Grants STEM Degrees Innovation Momentum B+ Innovation-Friendly Sustainable Policies Source: INDIANA S INNOVATION SCORECARD LETTER GRADES B B B 43

21 CURRENT Emergence of Innovation Capacity Many communities throughout Northern Indiana are actively building and leveraging existing high-value innovation resources. Others are actively exploring opportunities in their urban core to foster entrepreneurship, partner with industry and invest in amenities. Some examples from the region include: Talent retention initiatives such as enfocus, a talent incubator and social innovation engine based out of the Union Station Technology Center that aims to find bold and innovative solutions that serve regional industries with bright, young entrepreneurial talent. Fellows are retained from local universities for one year to tackle the regional challenges to help bring transformative economic development to communities, shape socially focused startups and create new commercial products or innovations. The University of Notre Dame is an unparalleled innovation driver with massive development occurring both on and off campus and increasing connections between the community and Downtown South Bend. We re going through the most significant boom in construction we ve had here in our history, said Tim Sexton, associate VP for public affairs. Notre Dame has spent an average of $95 million a year on construction for the past 6 years, will spend an average of $237 million a year for the next three, an increase of 249%, for a total investment of $1.281 billion in less than a decade (see map on page 37). Active projects on campus include the Stadium Crossroads Project; McCourtney Hall research building; and two new dormitories, Jenkins Hall and Nanovic Hall. Notre Dame has invested $625 million in the Northeast Neighborhood since a partnership of the University, City of South Bend, residents and businesses began a revitalization effort. Off-campus investments in projects such as Innovation Park, Eddy Street Commons, and the Robinson Center have fostered partnerships to help spur development, infrastructure improvements and a new private high school in the community. Recently, 42 of 52 new homes in the Eddy Street Triangle Neighborhood have been built and 128 of 185 new nearby condominium units have been sold. 44

22 CURRENT Other University investments include: environmental research at St. Patrick s County Park through the ND-LEEF program, a new boathouse along the St. Joseph River and the Notre Dame Center for Arts and Culture in the downtown museum district. Additional off-campus projects under development include the St. Joseph River Hydropower project, the Embassy Suites Hotel (which will complete phase one of Eddy Street Commons), phase two of Eddy Street Commons, expansion of Innovation Park, and phase two of the Overlook apartments. Downtown South Bend s Innovation District, which encompasses Ignition Park, the Renaissance District/Union Station Technology Center, Ivy Tech Community College, the transportation depot and Four Winds Field for minor league baseball. Downtown Goshen, which encompasses co-working spaces, downtown retail and office space, Millrace mixed-use urban housing development and proximity to Goshen College. Downtown Mishawaka, which encompasses riverfront enhancements and IronWorks mixed-use redevelopment activities. City of Elkhart, which encompasses strengths in robotics and STREAM (Science Technology Research Engineering Arts/Architecture Mathematics) education through the Ethos Science Academy and programming enabled by the Horizon Educational Alliance. Notre Dame has spent an average of $95 million a year on construction for the past six years and will spend an average of $237 million a year for the next three, an increase of 249%, for a total investment of $1.281 billion in less than a decade Expansion of Metronet dark fiber to Plymouth in Marshall County and implementation of Project Lead the Way to enhance STREAM education in the K-12 school systems across the region. Each of these key assets and developments have helped inform the overall vision and project alignment for the RCNI plan and investment application. 45